Hot... Hot... Hot... Earnings warning from AOL....
From WSJ:
AOL Cuts 105 Jobs,
Warns of Pressures
On Quarter's Profit
DULLES, Va. -- America Online Inc. laid off 105 employees, the result of a
restructuring unveiled earlier this week, and warned analysts that heavy use
of the service might squeeze earnings in its fiscal third quarter.
Despite the potential pressure, which could trim third-quarter earnings by two
to three cents a share, AOL told analysts it remains comfortable with Wall
Street's full-year expectations. Analysts' mean earnings estimate for the
fiscal year ending June 30 is 91 cents a share, according to First Call.
AOL announced a 10% price increase earlier this week, responding to heavy
usage, it said. That increase goes into effect in April, too late to help earnings
in the current quarter. But additional revenue in the fiscal fourth quarter is
expected to offset any shortfall, analysts said.
Separately, AOL confirmed that it eliminated 40 jobs at its Entertainment
Asylum Web site and 65 jobs at its WorldPlay interactive-games unit. The
Entertainment Asylum cuts were related to the restructuring, which
recombined AOL's effort to develop interactive programming with the core
on-line service, AOL said. The WorldPlay layoffs resulted from cancellation
of a game project. AOL employs a total of about 9,000 people.
Shares of AOL rose $2.50 to $117 in yesterday's New York Stock Exchange
composite trading.
--- Journal Link: Join an on-line discussion about America Online's future at
The Wall Street Journal Interactive Edition at wsj.com |
